Petroleum
As Hurricane Rita approached, 16 refineries along the Gulf Coast
shut down as a precautionary measure and to allow employees
to evacuate, and as today, 5 are completely shutdown. In sum,
there are 3 refineries still shut down in the New Orleans area
following Hurricane Katrina, 4 shut down in the Port Arthur
and Lake Charles areas, and 1 shut down in the Houston/Texas
City/Galveston refining area, amounting to a total of about
2.1 million barrels per day of refining capacity that is currently
offline. This accounts for about 900,000 barrels per day of
gasoline, about 500,000 barrels per day of distillate fuel,
and about 200,000 barrels per day of jet fuel that is not being
produced as long as these refineries remain shutdown. Please
consult the Office of Electricity Delivery and Energy Reliability's
Situation
Report for specific information on the refineries.

Natural Gas
For the first time since Hurricane Rita made landfall, a spot
price quote at the Henry Hub was available today (October 7)
from the Intercontinental Exchange, an online trading platform.
The Henry Hub spot price was $13.68 per MMBtu, while prices
at other points in the Gulf region averaged $12.95. The overall
average price for the Lower 48 was $12.19 per MMBtu, 78 cents
lower than on October 6. Sabine Pipeline, operator of the Henry
Hub, has now lifted its force majeure for gas flows at 12 pipeline
interconnects at the hub, but still notes it will continue its
force majeure for all remaining points until further
notice. There are 14 pipelines with interconnections at the
Henry Hub. As a result of these changes at the Henry Hub, the
New York Mercantile Exchange (NYMEX), where futures contracts
are traded for delivery to the Henry Hub, has lifted the force
majeure condition for both September and October 2005 natural
gas futures contract delivery obligations, effective for gas
day October 5. NYMEX said that all participants who have outstanding
obligations for these delivery months should commence nomination
procedures in conformance with prescribed practices.

In an attempt to assess the effects of Hurricanes Katrina and
Rita on oil and gas production, the Louisiana
Office of Conservation is addressing the operating status
of producing wells in a thirty-eight (38) parish region for
information. On October 7, the Office said it has received reports
indicating 535.7 million cubic feet per day (MMcf/d) of onshore
and offshore (in State waters only) natural gas production has
been restored, while 42.9 percent of the wells reportedly remain
shut-in. However, the Office has not received information on
approximately 38.5 percent of the oil and gas wells in the region.
The daily gas production capacity of the 38 parish region is
estimated to be approximately 2,235 MMcf/d, based on the average
production reported to the Office for the period January 2005
to May 2005.

There are 20 natural gas processing plants, with capacities
equal to or greater than 100 million cubic feet per day, in
Texas, Louisiana, and Mississippi that are not active. A number
of non-operating plants with a total capacity of 4.76 billion
cubic feet per day (Bcf/d) are operational, but are not active
owing to upstream or downstream infrastructure or supplies being
unavailable. These plants had flowed 2.29 Bcf/d before the hurricanes.
A number of the inactive plants are expected to be operating
within 4 weeks. Based on updated data, these plants have capacity
of 2.87 Bcf/d and pre-hurricane flow of 1.62 Bcf/d. Based on
updated company information, pre-hurricane flow volumes indicate
that the average utilization of the non-operating plants was
roughly 56 percent. Based on updated data on estimated pre-hurricane
flow volumes, the non-operating processing plants represent
about 7.30 Bcf/d.